Clearing is at the heart of the financial system and has become a key issue since the referendum as the majority of transactions denominated in euros are handled through London. The activity is closely watched by financial regulators around the globe because it is intended to reduce risk in the financial system. Clearing houses act as intermediaries between the complex derivatives transactions which, for example, help protect companies against interest rate moves. “Frankfurt as a financial centre will profit from this because clearing will become more attractive for German and international players,” Schäfer said. But there have been warnings that risks to the financial system could increase if euro-clearing business migrates and fragments around other financial centres.

Source: The Guardian October 09, 2017 15:22 UTC